GEITHNER UNPLUGGED — POLITICO’s Kate Davidson and MJ Lee picked out some of the juicier nuggets in Andrew Ross Sorkin’s superb NYT Magazine piece on Tim Geithner and his book “Stress Test: Reflections on Financial Crises” to be published Monday, including this amazing quote: “Faced with public anger over Wall Street bailouts and the economic wreckage left in the wake of financial crisis … Geithner sought former President Bill Clinton’s advice on how to address the populist unrest. ‘You could take Lloyd Blankfein into a dark alley and slit his throat, and it would satisfy them for about two days,’ said Clinton, referring to the CEO of Goldman Sachs."

‘Then the blood lust would rise again.’ …

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M.M. SIDEBAR — The Bill Clinton quote is really the juiciest bit in Sorkin’s piece and captures a major problem for Hillary Clinton in 2016, assuming she runs for president. She will certainly face at least some pressure (though maybe not much depending on the field) to further distance herself from Wall Street. But nothing she does short of demanding mass imprisonment is likely to satisfy the “blood lust” of which her husband spoke. That blood lust is real in the progressive movement (and to an extent in the GOP populist movement) and it’s not going away.

And if Hillary Clinton goes part way toward slamming the financial industry she could both fail to satisfy the left and scare off a huge pool of money and drive it to her eventual GOP opponent, assuming that person is not even more terrifying to Wall Street. There are certainly ways for Hillary Clinton to thread this needle. But it will take some deft politics. And it will be fascinating to watch how she does it.

OTHER TIDBITS picked out by Davidson and Lee: “Among the other revelations in the article: [Geithner] doesn’t think the problem of ‘too big to fail’ has been solved; he was at odds with former Treasury Secretary Henry Paulson and former Fed Chairman Ben Bernanke over the collapse of Lehman Brothers; and he floated Hillary Clinton as a candidate to succeed him before he left Treasury … The president was so determined to have Geithner stay on longer that at one White House event, he took Geithner’s wife aside to try to enlist her help."

TBTF IS ALIVE — “When Geithner was still at Treasury, he toed the line on the administration’s position that the 2010 Dodd-Frank law would, without a doubt, put an end to bailouts and the problem of ‘too big to fail’ banks. But he’s clearly ditched those talking points. … Sorkin describes a lecture Geithner delivered to Larry Summers’ Harvard class … Asked if ‘too big to fail’ still exists, he replied, ‘Yeah, of course it does,’ describing attempts to end too big to fail as a ‘Moby Dick’ for economists or regulators. ‘It’s not just quixotic, it’s misguided.’"

“SELECTION BIAS” — “Despite his frustration with the frequent misperception that he came from the banking world, Geithner makes clear in his book that he viewed Wall Street as essential to the functioning of the economy. ‘I did not view Wall Street as a cabal of idiots or crooks,’ Geithner writes … ‘My jobs mostly exposed me to talented senior bankers, and selection bias probably gave me an impression that the U.S. financial sector was more capable and ethical than it really was.’

VOLKCER TURN AROUND — “Though reform advocates view Geithner as a Volcker Rule opponent, Geithner told Sorkin he actually came to support the idea of a proprietary trading ban — even if he didn’t think it would have prevented any banks from failing during the crisis. Why the change of heart? Politics. Geithner said he believed it would make the financial reform legislation easier to pass. Still, he says in his book he was happy to leave the impression that he was against to make it more palatable to Democrats.” http://politi.co/1m42cBV

MINDS UNLIKELY TO CHANGE — M.M. has not read the Geithner book yet. We expect to get it Monday. But based on Sorkin’s piece and the initial react, “Stress Test” is not likely to be a game-changer in terms of how people view the 2008 crisis and subsequent bailouts. Those who see TARP as an unfortunate necessity to avoid a global collapse and Great Depression (that has since turned a tidy profit) will get some new fuel for their arguments. Those inclined to view Geithner as far too Wall Street-friendly and the TARP program as a boondoggle for banks are unlikely to be swayed. To wit.

MORE ON “STRESS TEST” — M.M. discussed the book (or what we know of it so far) on WNYC’s “Money Talking” with Charlie Herman and Bloomberg’s Diane Brady. Listen here: http://bit.ly/1iuDbys

ECONOMISTS HOPEFUL — WSJ’s Kathleen Madigan: “The U.S. economy is likely speeding ahead this quarter — perhaps growing faster than 4 percent — as the recovery gets back on track after a winter when growth slowed to a crawl. … According to The Wall Street Journal's May survey of 48 economists, the consensus forecast is for annualized real growth in gross domestic product of 3.3 percent, better than the 3 percent pace projected in the April survey. … The growth spurt follows almost no movement during most of the winter." http://on.wsj.com/RwFOpp

JEB BUSH “RAISING MONEY IN KEY BATTLEGROUND STATES” — POLITICO’s Lucy McCalmont: “George P. Bush says he doesn’t have any ‘inside baseball’ on whether his father, former Florida Gov. Jeb Bush, will launch a bid for the White House … but said his father is ‘leaving the option open,’ and raising money in ‘key battleground states.’ … However, George P. Bush added that his father will have to consider ‘the rigors on family life’ as well as his life now as a businessman.

“Echoing his uncle — former President George W. Bush — George P. Bush said Jeb Bush’s odds of winning are not part of his decision. … ‘I think he is leaning towards running for president. He’s got a strong track record to run on.'" http://politi.co/1fT3kbn

GOOD FRIDAY MORNING — Houston Texans took Jadeveon Clowney with the number one pick in the NFL draft. Cleveland traded up and took Johnny Manziel … but not until the 22 nd pick. http://es.pn/1mHr4SS

DRIVING THE DAY — President Obama delivers remarks on energy efficiency at 9:55 a.m. local time at Walmart-Mountain View in Mountain View, Calif. … JOLTS report at 10:00 a.m. will be closely watched for the quits and hiring rates … Wholesale inventories at 10:00 a.m. expected to rise 0.5 percent … Treasury Secretary Jack Lew meets with members of the Business Council to discuss the state of the economy.

** A message from JPMorgan Chase & Co.: May 12 — 16 is National Small Business Week, and Chase is proud to be #SBW14’s presenting sponsor, supporting the official celebration of American enterprise with insight, information and offers to help small businesses thrive.

NJ FINANCES DOG CHRISTIE — POLITICO’s Maggie Haberman and MJ Lee: “Here’s how drastically Chris Christie’s political fortunes have turned: Bridgegate might not be his biggest problem. Just as the New Jersey governor is trying to turn the corner on the traffic scandal … now he’s getting blamed for a yawning budget deficit and recent downgrade of the state’s debt. Christie and state lawmakers have less than two months to close a sudden budget hole. Analysts say the governor’s administration brought on the problem by projecting the state would collect much more in tax revenue than it did; Christie’s aides insist the legislature bears some of the blame.

“Either way, the stream of bad headlines could undercut a central tenet of Christie’s comeback attempt and message in a potential 2016 bid: that he’s led an economic ‘miracle’ in the Garden State. … His allies have been adamant that he won’t be personally ensnared by the bridge scandal and that his record will carry him to national glory. But the financial woes may mean Christie will have even more explaining to do. … The Fitch downgrade means Christie now oversees just one of three states in the country with a debt rating in the ‘single A’ category.” http://politi.co/1kR4l0T

GOP CRACKS DOWN ON 2016 DEBATES — POLITICO’s James Hohmann and Dylan Byers: “Virtually every Republican leader agrees that the 20 GOP debates in the last presidential primary season damaged Mitt Romney … and briefly made frontrunners out of eventual flameouts like Herman Cain and Newt Gingrich. Party leaders vowed never to let it happen again. On Thursday, they took action, moving at a Republican National Committee meeting … to dramatically cut the number of GOP primary debates — possibly in half.

“A group of 13 RNC members, essentially operating under the control of party Chairman Reince Priebus, will choose the timing, location and media partners of the 2015-2016 Republican primary debates. … To make it stick, the plan would crack down on candidates who participate in debates that aren’t sanctioned by the party — by barring them from ones that are.” http://bit.ly/1nujyHN

APPLE EYES BEATS HEADPHONES — NYT’s Ben Sisario, Brian X. Chen and David Gelles: “Apple is in discussions to buy Beats Electronics, the company behind the popular Beats by Dr. Dre headphones, for $3.2 billion … in what would be the biggest acquisition in Apple’s history. The deal would also include the new Beats Music streaming service, which was introduced in January as a competitor to Spotify and Pandora, and could signal an effort by Apple to transform its approach to music more than a decade after it opened the iTunes download store.

“A deal has not been consummated, and the negotiations could still fall apart … But if it is completed, the sale could be announced as early as next week … For Apple, whose revenue growth has slowed sharply in the last few years, the deal could point to a headlong move into the frontier of streaming music. The company, which only last year released its streaming product, iTunes Radio, has been slow to enter the streaming world.” http://nyti.ms/1iuJAtE

ALL-CASH MORTGAGE DEALS ON THE RISE — WSJ’s Kris Hudson: “All-cash home purchases are on the rise again — buoyed by retirees instead of pure speculators — signaling a shift in the way Americans view homeownership and in the mortgage market. During the year's first quarter, 33 percent of the existing homes sold in the U.S. were purchased entirely in cash. That was up from 31 percent for all of last year and 29 percent in 2012 … Cash sales began rising sharply in the aftermath of the housing bust, mainly due to the voracious appetite of professional investors using cash to buy heavily discounted homes to rent or flip.

“Now, the all-cash sales reflect a fundamental change as the housing market continues to heal. Economists and real-estate agents say the rebound in all-cash deals is bolstered by retirees who are using the equity in their existing homes to buy different homes to downsize or for rental income … Economists and housing-market observers say mom-and-pop investors remain active in the home market even as institutional investors rein in their buying.” http://on.wsj.com/1ge3h4K

ALSO FOR YOUR RADAR —

EX-NSA CHIEF LAUNCHES CONSULTING FIRM — POLITICO’s Darren Samuelsohn and Joseph Marks: “Former National Security Agency chief Gen. Keith Alexander is launching a consulting firm for financial institutions looking to address cybersecurity threats, POLITICO has learned. Less than two months since his retirement from the embattled agency at the center of the Edward Snowden leak storm, the retired four-star general is setting up a Washington-based operation that will try to attract clients based on his four decades of experience in the military and intelligence …

“Alexander will lease office space from the global consulting firm Promontory Financial Group, which confirmed in a statement on Thursday that it plans to partner with him on cybersecurity matters.” http://bit.ly/1hBjdOP

TRANSITIONS — Saat Alety has left the Financial Services Roundtable to become Communications Director for Rep. Ed Royce, starting on Monday.

STATE COURTS WIDEN REGULATION OF DEBT COLLECTION — American Banker’s Maria Aspan: “State courts around the country are starting to reform the ways they handle lawsuits over unpaid bills, widening the regulatory overhaul of banks' and third parties' debt-collection practices. New York's top judge last week proposed sweeping reforms for creditors and collectors looking to sue customers, unveiling rules that consumer advocates call the most comprehensive in the nation. … Maryland's district courts, which have drawn criticism for summoning borrowers to judge-less rocket docket’ mediation sessions with lawyers for banks and debt collectors, modified those sessions after American Banker wrote about them in February.” http://bit.ly/1ockrYf

INVESTORS SEE GOP TAKEOVER — Per Citigroup analyst Matt Dabrowski: “Global macro investors see Russia cross-border trade sanctions and a GOP takeover of Congress as the most likely political developments this year, according to a new Citi Political Analysis Poll. Investors also view as likely a breakdown in Iran nuclear talks, fringe victories in European elections, a snap Greek election, and China-Japan military tensions. Our survey suggests that despite apparent market indifference, investors do see political and security risks in Russia, China and Europe, raising the question of whether market participants have fully considered these geopolitical risks.”

OMNICOM/PUBLICIS DEAL DIES — FT’s Ed Hammond and Emily Steel in New York and Adam Thomson in Paris: “The $35bn merger of Publicis and Omnicom has collapsed after the deal to create the world’s largest advertising company by revenues became mired in management infighting, regulatory trouble and tax issues. Both boards have agreed to terminate the proposed deal with no break-up fee. … The failure of the Franco-US alliance marks one of the largest merger breakdowns in history and up-ends expectations for an advertising industry that had been seeking to consolidate in response to the turmoil huge companies like Google and Facebook have wrought on their traditional business.” http://on.ft.com/SGh3s3

** A message from JPMorgan Chase & Co.: May 12 — 16 is National Small Business Week, and Chase is proud to be #SBW14’s presenting sponsor, supporting the official celebration of American enterprise with insight, information and offers to help small businesses thrive. Chase’s national sponsorship will support Small Business Week events across the country, culminating in the announcement of the National Small Business Person of the Year in Washington D.C. on Friday, May 16. Visit: http://bit.ly/1koovzl **

** A message from the Independent Community Bankers of America: The first U.S. community banks were formed in the wake of the American Revolution to stabilize the nation’s postwar finances. By providing loans to entrepreneurs and developers, these community banks were soon stimulating economic growth and financing the rise of the world’s greatest democracy. Their legacy of relationship banking and local economic and job growth continues to this day, with more than 2,500 of the nation’s community banks in business for more than 100 years and the oldest dating to the presidency of John Adams. Today serving communities in every congressional district, community bankers nationwide urge Congress to advance tailored banking regulations that will allow these job creators to continue supporting local economic growth for decades to come. www.icba.org/aboutus **

Authors:

About The Author

Ben White is POLITICO Pro's chief economic correspondent and author of the “Morning Money” column covering the nexus of finance and public policy.

Prior to joining POLITICO in the fall of 2009, Mr. White served as a Wall Street reporter for the New York Times, where he shared a Society of Business Editors and Writers award for breaking news coverage of the financial crisis.

From 2005 to 2007, White was Wall Street correspondent and U.S. Banking Editor at the Financial Times.

White worked at the Washington Post for nine years before joining the FT. He served as national political researcher and research assistant to columnist David S. Broder and later as Wall Street correspondent.

White, a 1994 graduate of Kenyon College, has two sons and lives in New York City.